The Cape Town Convention's Improbable-but-Possible Progeny Part Two: Bilateral Investment Treaty-Like Enforcement Mechanism
32 Pages Posted: 17 May 2015 Last revised: 11 Nov 2015
Date Written: 2015
This Essay is Part Two of a two-part essay series that outlines and evaluates two possible future international instruments. Each instrument draws substantial inspiration from the Cape Town Convention and its Aircraft Protocol (together, the “Convention”). The Convention governs the secured financing and leasing of large commercial aircraft, aircraft engines, and helicopters. It entered into force in 2006. It has been adopted by sixty-six Contracting States (fifty-eight of which have adopted the Aircraft Protocol), including the U.S., China, the E.U., India, Ireland, Luxembourg, Russia, and South Africa. This Part of the Essay explores whether an investor-state dispute settlement (ISDS) feature for the Convention, similar to those typical of bilateral investment treaties (BITs), is needed, plausible, and feasible. It considers whether there are problems in the implementation and compliance by Contracting States that would warrant the costs of adopting an amendment to the Convention to create an ISDS regime. While data is not sufficient to reach a firm conclusion, it is too early to foreclose consideration of the ISDS issue. The Essay outlines the potential scope and content of an ISDS for the Convention and the feasibility of adopting an amendment. It further explains that criticisms of ISDS regimes under BITs would not be applicable to a Convention ISDS regime. Finally, an overarching goal of the Essay is to introduce the idea of an ISDS regime for a transnational commercial law convention outside of the typical domain of BITs and other international investment agreements. This would be a novel approach.
Keywords: Transnational economic law, investor-state arbitration, international investment agreements (IIAs), treaty compliance, treaty implementation, finance, secured transactions, default, insolvency, enforcement, asset-based financing, remedies, Pia Eberhardt, Cecilia Olivet, Profiting from Injustice
JEL Classification: F42, F53, F65, G15, G32, K22, K33, O16
Suggested Citation: Suggested Citation